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Greetings, Naaree, and welcome.

I am convinced into opening a Roth for self and wife.
We meet the AGI criteria.
Have a long way to go before retiring.

Thinking of putting it in a S&P 500 based index fund.
Have some questions.

1. Do you think it is a good idea to put this into such a fund?

2. Which one is a good one? I am thinking of putting it in Vanguard Index 500. Any suggestions?

3. How do I go about starting it with Vanguard?

4. Can I do it at anytime? Meaning should I open it right away knowing that I am going to do it anyway. Or wait until the cut off date for the taxable year.

5. What is the cutoff date for the year? Is it the calendar yr or April 15, 1999, for 1998.

6. How does one track the performance of one's Roth investment into a fund? Just follow the account status information the broker provides?

For the beginning stock investor, an index fund IMHO makes a good starting vehicle for a long term investment. You will enjoy near market returns (and that includes losses) as you learn more about investing your money. It gives you breathing space as you learn how to trade on your own. Around Fooldom, we believe the Vanguard 500 is a great mutual fund to use for that purpose. Just call them or visit their website at and they will help you through the steps necessary to start your Roth IRAs.

You can open the accounts at any time, and the earlier the better to take advantage of the compounding of earnings that lets your money grow. As far as the cutoff, you have until April 15, 1999 to open a Roth IRA for the 1998 tax year. You should track your returns based on the anniversary date of your account. Deposit your money on 8/1/98 and calculate its growth as of 8/1/99 based on that initial deposit. Returns are time sensitive. The ones you see quoted in the papers or by the funds themselves are almost always based on performance since 12/31 of previous years. Thus, they rarely have applicability to the rate of return in your portfolio.


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